MannKind Corporation (NASDAQ: MNKD)
MannKind has been the talk of the town in the healthcare sector for quite some time. It’s pretty rare when a stock stays in the top ten on the healthcare heat map on Stock Twits for more than a month; but MannKind has been there for about three months now. There’s good reason for the strong debate revolving around the stock. Today, we’ll take a look at MNKD from the bearish point of view and the bullish point of view; and we’ll talk about why I’m expecting to see big long term gains from the stock.
MannKind Bearish Argument
The bearish argument on MNKD revolves around Afrezza; the company’s inhaled insulin. As Goldman Sachs pointed out early in pre-launch, sales of Afrezza just haven’t been what analysts expected to see. As a result, the stock was downgraded by Goldman Sachs months ago; causing declines that would last for some time. So, the bearish argument is simple…MannKind’s flagship product is Afrezza, and if Afrezza doesn’t generate sales, investors can’t expect to see profits. However, I think the bears are missing a few key aspects associated with the stock.
MannKind Bullish Argument
Before I get into this side of the argument, I think it’s important to point out that I am a MannKind bull. Personally, I can’t imagine a scenario where MNKD isn’t likely to grow in the long run. There are several reasons for my opinion on this; including the following…
- Afrezza Is Incredible – First off, we can’t discount the incredible innovation in medicine that Afrezza represents. MannKind has figured out a way to take a medication that was only able to be delivered through an injection and find a way to deliver it through an inhaler. As a guy who is deathly afraid of needles, this is a huge deal for me. However, outside of my own fears, I think this will prove to be a major hit for the diabetic community entirely. The truth is that I have several friends and family members that suffer from diabetes; and after talking to all of them, I haven’t had one tell me that they would rather use a needle than an inhaler. Leading us to the next point…
- Afrezza Is Still In Pre-Launch Mode – Those who are considering investing in MannKind should keep in mind the fact that Afrezza is still in pre-launch mode. There has been absolutely no advertising as of yet. As a matter of fact, after speaking with several people in the diabetic community, I can honestly say that not one of them even knew about Afrezza before I mentioned it. However, this is likely to change very soon. Within the coming weeks, Afrezza will move into the Direct-to-Consumer campaign; enlightening consumers in the diabetic community with regard to their options. When this happens, I’m expecting to see big gains!
- Technosphere – The technology that MannKind used to turn the injection only insulin into an inhaled powder is called technosphere and is proprietary to MannKind. This technology is going to be a major game changer for the stock moving forward. That’s because MannKind has been very open about the fact that they are working to use this proprietary technology to develop more treatments. So, in the future, we’re likely to see more injection only medications being delivered through an inhaler; and MannKind will take the profits from the innovation.
All in all, keeping the three main factors in mind, it only makes sense that MannKind is likely to grow long term. So, if this stock isn’t yet in your portfolio, you may want to strongly consider adding it!
What Do You Think?
Where do you think MNKD is headed and why? Let us know in the comments below!